Crowdfunding in india is still in its nascent stages. The potential however is incredibly high for Indian crowdfunding with a nationwide upsurge in dynamic and fascinating independent projects breaking boundaries.

However India might benefit from an existing crowdfunding ideal ingrained in its socio-cultural practices. The "chanda" collection for the community puja (festival) is pure, unadulterated crowdfunding.

India's first crowdfunded film came way back in the 70's with Shyam Benegal's Manthan, which was produced by contributions from 2 milk farmers in Gujarat.

Today, a lot of prominent Indian filmmakers, musicians and entrepreneurs on the scene are waking up to the potential and power of crowdfunding. Some prominent examples include Onir (whose National Award winning film I AM was crowdfunded by more than 400 contributors); Kannada film Lucia and many more!

www.igniteintent.com provides a web based platform and social community for funding creative and innovative ideas. Users can either upload their idea or contribute to funding for rewards to any interesting projects listed.

Ignite Intent states on its website that it is associated to Crowdsourcing.org – “a global neutral organization dedicated solely to crowdsourcing and crowd-funding. As one of the most influential and credible authorities in the crowdsourcing space, Crowdsourcing.org is recognised worldwide for its intellectual capital, crowdsourcing and crowd-funding practice expertise and unbiased thought leadership”.

Many of the Indian crowdfunding projects we saw on the platform were of a tech and engineering based nature, others in arts and crafts space.

The management team behind are the Indian crowdfunding platform Ignite Intent is:

Rinkesh Shah – Founder, Head Business Development who held positions at Tata Consultancy Services & INFOSYS and Jubin Joshi – Chief Marketing Advisor a technology enthusiast, passionate about the latest trends in online Marketing, Sales and Advertising technologies.

Start51.com is a new Indian crowdfunding platform that offer’s a creative fund platform to transform unique ideas into reality. The crowd-funding platform runs with an aim of offering direct financial support from contributors. This is an initiative to support projects from all industry verticals that meet Start51’s project guidelines.

The platform follows an all-or-nothing funding policy, in which projects must reach their funding goals to receive any financial aid. People from different creative industries like film making, music, designing and many others can register on start51.com and start a project. Project creator’s need to set a funding goal and deadline for the venture.

Indian crowdfunding platform Catapooolt geared to independent film making. Founded by a team who helped pioneer crowdfunding in India as well as distribution for Indie films. Catapooolt, have put together a platform that goes beyond just raising capital, but also supports finding talent and even locations for the film shoot once its funded and ready to move towards production planning.

Management team:

Satish Kataria Managing Director

Satish KatariaWith more than 13 years of fund management experience and having worked in India’s first SEBI registered Film Venture Capital Fund, Satish knows a thing or two about film funding. On a side note he is also one of the pioneers of crowd funding in India. Unofficially he is known as the "Funds guy" in the team.

Sneha Kohli Market Evangelist

An engineer by profession she is an avid problem solver and has an incisive vision for growth. A hardcore techie with a good amount of knowledge and an entrepreneurial zeal to take Catapooolt forward. She is our information specialist and market evangelist on crowd funding at catapooolt.

Another Indian crowdfunding platform focused on creative projects, film, theater, food, music, arts and crafts, Co-founded in 2012 by Anshulika Dubey,Wishberryis India’s biggest crowdfunding site, providing a means for directors, musicians, artists and entrepreneurs to find funding from the public at large, rather than VC or angel investment.

Anex-McKinseyanalyst, Anshulika discovered the concept while writing a report on how crowdsourcing was impacting the social sector. “It really fascinated me to see how disruptive and democratic this process was and I found my calling in bringing this to India. Crowdfunding was needed in India to rescue innovation in this country.”

To make all this happen she teamed up with another ex-McKinsey consultant, Priyanka Agarwal, who came on board as co-founder.

Anshulika Dubey provided a few isnights:

How does Wishberry differ from the big multinational sites such as Kickstarter or Indiegogo?

1.Wishberry [is very] much like Kickstarter [in that it] curates its projects and has chosen to play only in the areas and categories it wants to. Apart from the funding similarity in process, we operate differently from our international counterparts by bringing in the angle of consulting services through a crowdfunding coach per campaigner. The coach guides the campaigner on pitch video, rewards, their pricing, page content, graphic design, marketing and identifying the target audience for the campaign, plus guidance throughout the campaign on its social media marketing. This is because India is a service economy, we cannot be left alone to run a crowdfunding campaign on our own. Plus Indians, as I mentioned, need help in communication skills, so we help with what needs to be communicated on the page, through the video, etc., about the project.

2.Payments in India operate differently. Payment gateways are not allowed to store credit card information for more than 12 days. In this case, we deduct a contribution when it's made and not at the end of the campaign like Amazon payments, which Kickstarter uses. But since we also follow the ‘All or Nothing’ policy, we have to return the funds if a campaign does not meet its target.

3.India is a cash economy, there are very few people who make payments online using credit and debit cards. So we offer cash/cheque collection services at doorstep as well in addition to online payment collection. In general collecting funds is not difficult, it just works differently.

What are the main challenges holding back the spread of Crowdfunding in India, and do you have any concerns about issues that could stop it becoming more popular?

The only issues are internet penetration and server connectivity issues between banks and payment gateways. The intent of crowdfunding - to campaign and to fund - is definitely there. There is one more problem which is specific to India and that is campaign communication and presentation. Indians in general do not know how to make a compelling case to sell their projects due to poor communication skills. That's why Wishberry has a unique approach to this - we are not completely a DIY channel, we provide crowdfunding coaches to each of our campaigners who consult every campaigner on their pitch video, rewards, marketing plan and campaign content. So we are solving this problem by being a little more hands-on in our approach.

None of the above are problems that can stop crowdfunding from growing because internet penetration and connectivity [problems] will be solved. It's just a matter of time. And our consulting approach is delivering us a 30% success rate!

How much has been pledged to Wishberry, and how much has been actually raised?

We have adopted our ‘all or nothing’ policy only recently. Until now, we were a 'keep what you raise' platform, so whatever was pledged was deducted and given to campaigners. We have no pledging vs. raising numbers, but we have raised $500,000 so far from 7,000+ funders for 600 projects in the last two years.

What kinds of projects are most common/popular on the site? Which projects have been the major successes?

It's a mix between startups, publishing, events, arts and creative projects. Major successes to date have been: Mestrupedia - a comic book on menstruation to educate girls about periods. Stay Attuned – a classical-pop music album which was produced as a collaboration of artists from 13 countries by an Indian singer, and a radio station for the rural folk of Uttarakhand. The rural folk of this state didn't have a good source of entertainment so [National Resource Institute] NRI set up a radio station for them.

What are the future goals for Wishberry, how big do you want the site to become?

Crowdfunding is just a means to a bigger end for us and that end is to rescue innovation in this country. So through this we aim to make our platform a place to: fund ideas, discover ideas, validate ideas, get resources other than money to jumpstart the idea, and eventually make a market place, to sell these crowdfunded and crowdsourced innovations.

PRIYANKA AGARWAL

CO-FOUNDER | PRODUCT With a bachelors degree in both business & engineering from Wharton/UPenn, I co-founded my first company, Innova Materials, in the last year of college. But the US government didn't grant startup visas back then, so my dream to be an entrepreneur remained unfulfilled. Did the next best thing, joined McKinsey & Co. as a consultant in their New York office and moved to their Mumbai office a year later with the hope of starting up something in India. I was toying with a few ideas in my mind, but the real motivation to take the jump came in 2010, when the company i co-founded raised $5.5M in Series A funding in the US. I quit McKinsey and started Wishberry as India's 1st crowdgifting platform around weddings.

ANSHULIKA DUBEY

CO-FOUNDER | STRATEGY After graduating in 2007, I chose to get a corporate experience at McKinsey & Co. over pursuing a management degree because I valued practical learning over pedantic theories and formulas. At Mckinsey, I went on to become a founding member of the Social sector practice at the firm's India office. While authoring a McKinsey report on crowdfunding in 2012, I got so fascinated with the concept that I ditched a US employment opportunity and went on to pioneer online crowdfunding in India with Wishberry. Crowdfunding is a disruptive idea and I doggedly believe that crowdfunding isn't just going to be the next great business venture; it is going revolutionize philanthropy in India.

FARHAAN PANAGAR

OPERATIONS

After my Masters degree I got a job with Deloitte. In the midst of crunching numbers and making spreadsheets, which I enjoyed, I felt like I was following a herd, doing as told with no measurable impact of my work. So I soon realized that the biggest risk in life is simply not taking one and decided to work for a start up; what better place to realize my potential. Looking to work in finance & operations, I stumbled upon Wishberry; the concept blew my mind, it was surprising to see like-minded people funding each other to follow their passions. I instantly knew I had to be a part of this company and ever since I joined them, have never looked back ever since.

Funduzz is a young start up in the online crowdfunding space in India, through the Indian crowdfunding platform members can raise funds for their creative, innovative and entrepreneurial ideas. We believe no idea is small and deserves equal rights to see the light of the day. Leverage your social media contacts and the Funduzz community to raise awareness and visibility for your idea and get people to support you in your endeavours.

Another new Indian crowdfunding platform is Pikaventure, its so new that its not even running yet, but here is what they say on their blog: “Internet has never ceased to surprise and excite businessmen, entrepreneurs and investors. Up till now, everybody knew that the internet was a major force to promote and sell products and services, but nobody had even the slightest bit of the idea that the internet could also play a crucial role in establishing new businesses and bringing new entrepreneurs to the industry. The good news is that this is very much possible now in India with the latest and revolutionary way to fund your existing or new business. This revolutionary approach is called crowd-funding. The best part is that one of the most reliable companiesPikAVenture.com is exclusively bringing crowd-funding to India. So, if you have an idea, and you truly want to convert it into real profits and achieve a mind-blowing success, all you need isIndia’s crowd-funding platform with incubator support;PikAVenture. Let’s try to understand crowd-funding somewhat in more detail.”

Is an Indian Free online fundraising platform to help raise money for medical bills, tuition fees, or any personal issues users wish to overcome.

YourSeva is a nonprofit Indian organization that helps those who need additional financial support for personal issues. Through YourSeva, people can raise money for any personal issue including medical bills, tuition fees, adoption charges, funeral costs - nothing is off limits. Our users can simply create a fundraising page with their or a loved one's story, share their page to attract donors, and easily collect money.

Management: Kalpi Desai, CEO & Co-Founder of YourSeva

Who can donate?

We have numerous people from all over the world who are looking to help others. Donors generally look for inspiring stories that speak to them in some way. By sharing your story and demonstrating a need for funds to donors, our users can get the help they need to change their life. Futhermore, you can share your fundraising page to family and friends and collect funds from close ones.

Why use YourSeva?

In the past, people have asked family, friends, and even strangers for monetary help in times of need. They generally collected money in person or through mail, which can be slow and cumbersome. We're in a new age now why not make this process easier and bring it online?

Crowd funding is a phenomenon that has spread like wild fire in the West and today it is an important factor to estimate the success of a product.

There are still only a few players in this field of venture crowd funding platform in India like Wishberry and Ignite Intent. Fundlined, started by 17 year old Siddharth Shetty, is a new entrant in this field. “This is a crucial year of my life since I am in class 12, and here I am starting my own venture instead of trying to crack IITs and get into other premier Indian colleges,” he says, adding that he is keen on taking Computer Science as an undergraduate course.

“I never really liked coding, but it was only when Fundlined happened that I realized what an amazing world it is.” Siddharth had never heard about crowd funding either before he started Fundlined. It was while listening to a promo of a startup conference in Goa on the radio that the idea of creating a centralized platform was born.

Siddharth says the USP of Fundlined is that it works with each and every campaign creator at a personal level to ensure that their campaign has the best chance of being a success. “Our platform is designed to ensure that users enjoy simple, fun and safe crowd funding experience.”

He plans to roll out a number of features, and plans to tie up with strategic partners to change the landscape of crowd funding in India. Siddharth had a rough time trying to convince the required people about his ability to start a crowd funding venture.

“Who would grant an approval to a 17-year-old CEO of a company which is venturing into the crowd funding space?” he says recounting his experiences. Siddharth remained optimistic, kept his cool and handled the situation instead of just grumbling about it.

Fundlined is pan India and has people working remotely from Goa, Roorkee, Mumbai, Bangalore and Noida. He says remote working is better for everyone – “you don’t need to waste time coming to office every day; you can complete your work at a time convenient to you as long as it gets done.”

Right now they have split their operations into three main sectors – Entrepreneurial, Cause and Creative. They are bootstrapping and Siddharth says they will raise funds only once they find an investor who is more like a ‘mentor’ and who can guide them to make Fundlined bigger and better.

Coming from a business family, the biggest challenge this young entrepreneur had to face was his family’s reservations about his venture. “A year ago, when I had shared my idea about Fundlined with my family and asked them to allow me to take a year off from school they had refused.”

The family even cut-off all funding for his venture when they realized his grades were slipping. Despite these setbacks he remains spirited and says, “These challenges will come and go. As you overcome such obstacles, it gives you a sense of confidence that you can tackle any future challenge head on.”

TheHotStart is self dubbed, the country’s [India’s] freshest and most comprehensive crowdfunding ecosystem.

Why did we create TheHotStart?

Creativity surrounds us, but funds restrict us. This is where we step in, as a preferred platform to bring together the powerful creators around us, and inspire evangelists, to fund various projects they feel a connect with. Consider this – an aspiring fashion designer wanted to promote her novel designs but did not have the funds to take her ideas forward (true story); a talented cyclist who has won several medals for India hasn’t been able to pursue his dream and now works as a security guard at an ATM in Bengaluru (another true story). While we love our music and we adore our art, the reality is that receiving legitimate funding for even some of the most outstanding initiatives remains a challenge in our country. TheHotStart is here to change that for good.

TheHotStart wants to be your trusted platform and aims to bring together anyone who has ever wanted to create anything and anyone who believes in becoming a part of your success story. Get ready to experience a highly integrated and professionally managed ecosystem that will bring great ideas to life. TheHotStart will work beautifully not only as a platform for showcasing amazing ideas but also as a community hub for connecting with like-minded people.

Each member of the core team at TheHotStart brings in-depth expertise of his/her domain. The team works closely together and jointly takes major business decisions that impact you and all our stakeholders.

Rajat Das – Head of Relations and Engagement

Rajat is a master salesman who spent his formative years working at a leading hospitality firm in India. Don’t let his young looks fool you. When it comes to people management and relationship building, he can give veterans a run for their money. At TheHotStart, he has been leading the relationships and engagement initiative. And due to his untiring efforts in the past few months, we are already seeing a healthy number of project requests coming in and our brand recognition continues to rise steadily. Considering TheHotStart wants to create an entire ecosystem around assisting people like you, Rajat is deeply involved in building the right corporate relationships for the firm. In his free time, you will usually find him mixing some amazing trance beats on his turntables or working out at a nearby gym.

Janani Krishnan – Editor-at-large

When it comes to content, Janani really is the queen. She has extensive experience in content management and is the happiest when she is drawing up and creating new content. She has a strong flair for languages (which can be inferred from the fact that she is fluent in English, Hindi, Tamil, French, Italian and Spanish) and is currently pursuing her Ph.D. in one of the many languages she wishes to master over her lifetime. At TheHotStart, she is not only responsible for leading our content strategy but is also closely involved in working with different project creators to ensure that their pitch is perfect and ready to lure all of us.

Udita Bhalla – Head of Marketing

Consider two different worlds – one where creative talent reigns supreme and the other where business acumen does. Now mix those two well to create a very unique blend. That’s what Udita brings to TheHotStart. She has 15 years of training in Bharatnatyam and has performed on stages all across the country. Having returned to India recently after completing her MBA in the UK, she fell in love with the vision and philosophy behind TheHotStart. By tapping into her exceptional insights about how creative people and processes work, Udita is leading our marketing initiative. And she is currently on a mission to tell the people of our country about how TheHotStart can give their ideas wings.

Fundedflow is an international crowdfunding platform that has had a great take up of Indian businesses and entrepreneurs.

Interestingly, it can be said that India has seen a massive crowdfunding success story many years before the term was coined: the story of the Reliance Industries founder Dhirubhai Ambani. His small yet growing textile business was crowdfunded by communities across the Indian state of Gujarat. Today’s India with its huge market and human capital has become a popular destination for global business and other investments that have identified opportunities. Its crowdfunding however has been restricted to microfinancing category projects, and the occasional donation-reward funding category.

Models

Donation model – In this model, individuals make a financial contribution to a project without any expectations of financial benefits.

Lending model – In this, the investor will loan money to the project with the expectation of being repaid under the terms and conditions agreed.

Investment model - The investor receives an equity stake in the project.

India scenario

In the next six months or so, many crowdfunding platforms are expected to be in India. Worldwide, nearly a thousand such platforms will be launched. Recently in the last two years, platforms such as Wishberry and Ignite Intent have been launched in the country. Most of them are in the rewards and donation space, as there aren’t too many regulatory issues around this model. There have been attempts at crowdfunding for events like the Goa Project and campaigns like Teach for India. Crowdfunding is slowly becoming an alternative funding channel for the film industry. Film Director Pawan Kumar from Karnataka raised Rs 51 lakh using Facebook and other platforms.

Challenges in India

The idea of crowdfunding is not new in India. Places of worship, for example, are built overnight using a large number of donations. However, the concept of online crowdfunding is new to the country. The industry is also not very investor-friendly. It seems people are still not ready for this concept.

Low trust levels of doing the things online is also a challenge. India’s ecommerce space needs to really mature before anything substantial can happen in this space. People need to be spending more and more online for them to even start thinking about backing online projects online. As long as the crowdfunding platforms are not making any financial promises to the contributors, they should be theoretically safe to operate.

However to build a credible case for the industry to grow in India, it would do help if these platforms proactively approach the regulators and work with them to processes so as to build long-term credibility and transparency. Ecommerce in India only got a boost when they initiated the concept of cash on delivery.

Similarly, crowdfunding will have to look at building an offline base to finally induce mass awareness and encouraging larger participation.

Legal issues

There are legal issues around crowdfunding in India, since equity-based online crowdfunding is not legalised in India yet.

It was made legal in the US recently when the Jumpstart Our Business Startups Act (JOBS) act was passed. Some of the key points of this Act are: The JOBS Act has put much restriction on the amount that can be borrowed via crowdfunding.

The Act has put an audit compulsion by certified public accountant in some cases of crowdfunding. Disclosures need to be made by the company raising funds and utilising it. The company needs to explain everything about its project for which it is raising funds.

The fund utilisation plan needs to be disclosed. Of the three crowdfunding models, donation-based crowd funding is the most pragmatic approach as of now. Lending-based microfinance platforms like KIVA need approvals from the central bank.

The Reserve Bank of India in 2011 approved Milaap, a non-profit microfinance institution to crowdfund from the overseas. In India, the concept is catching up fast and is posing a danger at the same time, as very soon these funds could scale up.

Many money laundering schemes might run in the name of crowdfunding via social media, pushing SEBI to set up a regulatory framework if it is found that such platforms involve large amounts of money or issuance of securities. A discussion is on to find a nodal agency for such activities following a talk with various stakeholders like banking regulator RBI, Finance Ministry and Corporate Affairs Ministry.

An official from SEBI stated that apart from setting up new rules after discussions with the stakeholders, any crowdfunding involving sale of securities can be either regulated under SEBI’s existing norms for Collective Investment Schemes or Alternative Investment funds.

Conclusion

There is no doubt that crowdfunding is rapidly being looked upon as a serious way of raising funds for startups and new businesses. The US and European agencies have started implementing laws for this to function. There are serious concerns, which make it mandatory to bring this method under the laws of the land. India may soon bring in the requisite laws to support this in a big way, as efficient crowdfunding system can really play the role of catalyst in bringing the startup ideas into reality.